The choice of law in the employment agreement
When parties conclude an employment agreement, they can agree that this agreement shall be governed by a law chosen by them. Such choice of law applies when the employment agreement is international in nature. When all connecting factors point to one country, the obligatory provisions of that country are not set aside by the choice of law in the contract. The latter could mean that although your employment contract states otherwise, if you are working in the Netherlands, Dutch law may be applicable to your employment relationship.
Explicit and implicit choice of law
Usually, a choice of law is explicitly included in a clause in the international employment agreement. Nevertheless, a tacit choice of law is also possible. This must be clearly demonstrated by the terms of the contract or the circumstances of the case. Examples of such indications are: a jurisdiction or forum clause, and references to a section of law of a country.
The impact of the choice of law
When the international employment agreement contains a valid choice of law, this does not mean that this law actually governs the whole contract.
First of all, the application of overriding mandatory provisions of the law of a country cannot be restricted. Important sections of Dutch law which are considered overriding mandatory provisions include provisions regarding working conditions, working hours, and minimum wage. These provisions apply irrespective of a possible choice of law when the situation falls within the scope of Dutch law.
Second, a choice of law may not deprive the employee of the protection afforded to him by obligatory provisions under the law that would have been applicable to the contract without the choice of law. Most of Dutch labor law consists of obligatory provisions, and, most importantly, Dutch dismissal law is fully mandatory. This means that even when the law of another country is chosen by the parties in the employment agreement, it is possible that (parts of) Dutch law also applies.
In conclusion
When no choice of law clause is included in the contract, this does not necessarily mean no choice of law has been made. Furthermore, when a choice of law is agreed upon, this does not always exclude the applicability of (parts of) the law of another country. So even if your employment contract states that a legal system other than Dutch law applies, it may still be that Dutch labor law is applicable. This is important because Dutch labor law often provides much more protection to you as an employee compared to other countries, such as in cases of illness and dismissal.
More information
Not sure about which law applies to the employment agreement? Please don’t hesitate to contact us for advice.
